There is a lot of tight tracking of Canadian citizens visiting the US. The new computer system knows every day that you spend visiting. That has an impact on the rules under which you might have to file a tax return.
There is some confusion about how long one can stay before one has to file a US tax return. Well, there are two rules.
One … you go for 183 this year and you are fine. Over that you are considered a “resident alien” for U.S. tax purposes and must file a regular U.S. tax return.
Two: There is also correct that for the snowbirds that stay every year there is a definitive ruling from the U.S. Internal Revenue Service confirming that it uses a rolling year calculation over a 3-year period, but it is complicated. This IRS is called the “substantial presence test” … here is how to do the calculation:
The test determines whether you have been in the U.S. long enough to be considered a U.S. resident for tax purposes. The IRS determines this by using an unusual formula that calculates the total number of ‘days’ you have spent in the U.S. over a three-year span, and that number must add up to 183 or more.
They calculate the sum as follows:
- Each day in the U.S. in the current calendar year counts as one day;
- Each day in the U.S. in the prior year counts as one-third of a day;
- Each day in the U.S. in the year before that counts as one-sixth of a day.
If the sum of those three numbers totals 183 or more, the IRS may insist you file a U.S. tax return.
When the IRS explains the test on their website, they give an example of someone staying only 120 days each year for three years, which would total 180 (by adding 120; 120 divided by 3; plus 120 divided by 6) and that means they are not considered a resident. However, if you had however in the 3rd year spent 150 days your total would be 190 and you would be a resident alien.